Why Refinancing Slowed Down in May — And What It Means for You

Rising mortgage rates crushed refinance activity in May, while purchase mortgage volume actually ticked up. Here's what the latest market data means for California homebuyers and homeowners.

May's mortgage market told a clear story: rising interest rates are making refinancing a tough sell right now.

Agency mortgage-backed securities issuance dropped 8% in May compared to April, and rate-and-term refinances took the hardest hit — falling over 32% in a single month. Even the biggest lenders in the country saw their refi volumes plummet 40% or more. When rates climb, the math simply stops working for most homeowners looking to lower their payment through a traditional refinance.

But here's the silver lining: purchase mortgage volume actually grew about 6% in May, showing that buyers are still active and the housing market is maintaining seasonal momentum despite the rate environment.

For California homeowners, this is a reminder that timing and loan strategy matter. If a rate-and-term refi doesn't pencil out right now, there may be other options worth exploring — like a cash-out refinance to tap equity or a HELOC to fund home improvements or consolidate debt.

If you're unsure whether refinancing makes sense for your situation, let's run the numbers together. Contact our team today for a free rate review and personalized mortgage analysis.